5 considerations when vetting a tech vendor
Speaking at NAHU’s annual conference in Albuquerque, N.M., on Monday, Kyle Reese, director of business development at Employee Navigator, shared five items brokers should consider as they select technology products.
The benefits business is at a “strategic infliction point,” he said, due to technology, which presents a whole new set of “opportunities and threats for everybody involved. “ The change is being driven by the cost of technology coming down, employees and employers expecting better, and regulatory issues.
Over the past two years, there has been a lot of money put into technology products related to employee benefits, but there has been more evolution in benefits technology in the last year than the previous 10, he said.
Technology is becoming necessary for brokers, adds Susan Rider, consultant in employee benefit and human capital management at Gregory & Appel Insurance, who attended the presentation.
“Everyone needs to do everything quicker, smarter and better,” Rider, who just completed her masters with a thesis on the integration between HR technology and benefits, said. “Technology is the only way to do that. HR teams are leaner and relying on us.”
Citing conversations Employee Navigator’s Reese has with brokers across the country, he shared what to consider when bringing technology into your agency:
1) Technology must avoid channel conflict
There has been a lot of consolidation in the industry — including Aetna’s acquisition of technology provider bswift — which could cause problems with integration across different carriers, Reese said. He said broker-owned systems are a “mistake” too, because brokers don’t want to put their clients on a system owned by other brokers, such as when Liazon was acquired by Willis Towers Watson.
2) Technology must be low-cost
Simply put, Reese said, brokers don’t want to spend a lot of money on technology.
3) Advisers should be proactive
Brokers need to talk to clients about all of their pain points, and not just benefits, he said.
4) Start slow
A lot of brokers see technology opportunities and are eager to get started. But Reese said they shouldn’t over-promise. He advised rolling out the product with a client that an adviser has a good relationship with.
5) Find a long-term partner
Many of the technology players have venture capital money, and venture capitalists want a return on investment in 5-7 years. Reese said these are tough conversations to have with potential partners, but advisers must ask questions about the long-term plans for the company, such as will it be acquired?
Gregory & Appel’s Rider said one way she overcomes potential challenges with rolling out technology to clients is by a doing a formal RFP and working with multiple vendors. “We are there in every implementation meeting,” she added. “Because we have specialists, we know what questions to ask because they [clients] don’t.”